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Home Credit Cash Loan and Bayanihan To Heal As One Act Experience

I am sure that some of us had already encountered an offer from Home Credit about their Cash Loan.  It is really something that we can consider especially in time of need but the question is, it is worth trying? In this post, I will share my experience and also my dissatisfaction with the Bayanihan To Heal as One Act (BARO).

Home Credit Cash Loan

Home Credit Offers a cash loan besides their usual gadget and product loan.  Not everyone will get an offer for a cash loan and when you do it means you are a good creditor. In my case, I was offered a Php85,000 cash loan payable in 36 months.  Since I have a medical emergency at that time I seized the opportunity.   However, it seems you can apply for a cash loan nowadays.

Getting the loan is easy and I was told to pay Php4,702.17 for 36 months. I had been paying it with full dedication.  One time I get anxious and decided to compute it, not that I did not compute it in the beginning but I want to analyze it.

For a loan of Php85,000 I will be paying a total of Php169,278.12. This means that the total interest on my loan is Php84m278.12 which means it has an interest rate of 99.15% for 3 years.  The Home Credit Cash Loan has an average of 33.05% interest per annum or around 2.75% per month.

If you have a credit card, the ceiling for annual interest rates is set at 24%. This means that a Home Credit Cash Loan is technically way higher in terms of the interest rate.

A Disappointing Bayanihan to Heal as One Act

I have no problem with paying my loans and I would say Home Credit is now very understanding compared to when they started here in the Philippines.  This is also the reason why I wrote an article before which serves as a Guide to Home Credit Users.

My disappointment came with the application of Bayanihan to Heal as One Act.  I was made to believe that these laws passed by Congress will help those who have loans outstanding during the COVID-19 pandemic but it seems it only gave additional burden.

During the Extreme Community Quarantine in NCR, Home Credit gave a 3-month payment holiday.  Seems good right? The fact is while you are not asked to pay your loans outstanding, at the end of the loan you will be charged an accrued interest based on the total amount of loan outstanding during those 3 months.

This policy above was once again repeated during the Bayanihan to Heal as One Act II.  While you are accorded payment holidays during November and December 2019, you are once again charged with accrued interest which you have to pay by January 2021.

In total, I have to pay more than Php12,000 in additional interest because I avail the relief of the government. Instead of freeing me from further costs, it seems it created an additional burden which is rather disappointing.

I have read several things about the law and it seems you still have to pay accrued interest but you can pay it in 2 ways according to the law and to an FAQ I read:

The accrued interest may be paid either:
  • one (1) time on your next due date; or
  • on a staggered basis until 31 December 2020.

Is this the proper application?  I do not know. I feel that it was not supposed to be like that but Home Credit says, the law says so.

David 'Master Pogi' D'Angelo
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